Ending a Tenancy Agreement Early
There might come a time when you want to get your tenants out of your property earlier than you originally planned, particularly if you’re looking at selling your property. If you find yourself in this situation, it’s good to understand your options and obligations as a landlord. In this article, we’ll tell you everything you need to know about what you can and can’t do when you want to end a tenancy early.
Check what type of tenancy agreement you have
When it comes to renting a property, it's important to understand the type of tenancy you have. One common type is a fixed-term tenancy, which has a specific end date. With this type of tenancy, both the landlord and tenant are bound by the terms of the lease for the agreed-upon period. This means that neither party can terminate the agreement before the end date without breaching the contract. Fixed-term tenancies offer stability and security for tenants since they know exactly how long they can stay in the property.
Fixed term tenancy
A fixed-term tenancy is a type of rental agreement that is set for a specific period of time, typically six months or a year. As a landlord, it is important to understand the benefits and considerations of a fixed-term tenancy.
One of the key advantages of a fixed-term tenancy is the security it provides for both the landlord and the tenant. With a fixed term, the landlord knows exactly how long the tenant will be staying and the tenant has the assurance of knowing they have a place to live for a set period of time.
Additionally, a fixed-term tenancy allows for predictability in terms of rental income and vacancy periods. This can be advantageous for landlords who rely on a steady stream of rental income.
It is important to note that once a fixed-term tenancy ends, it can be renewed for another fixed term or converted to a month-to-month agreement if both the landlord and tenant agree.
As a landlord, it is crucial to clearly outline the terms and conditions of the fixed-term tenancy in the rental agreement, including the rent amount, lease duration, and any specific provisions or restrictions.
Periodic tenancy
Periodic tenancy refers to a rental agreement that automatically renews on a periodic basis, such as monthly or yearly, without a fixed end date. This type of tenancy continues until either the landlord or tenant gives notice to terminate the agreement.
For landlords, periodic tenancy provides flexibility and the opportunity to adjust rental terms or terminate the agreement with proper notice. It also allows for steady, predictable income without the need to constantly renegotiate lease terms.
It's important for landlords to clearly outline the terms of the periodic tenancy, including rent amount, payment schedule, and notice requirements for termination. Maintaining open communication with tenants and providing clear documentation of the tenancy agreement can help prevent misunderstandings or disputes in the future.
How do I end a tenancy?
Most rental contracts are assured shorthold tenancies (ASTs), which give landlords the right to terminate a tenancy under section 21 of the Housing Act 1988. If you aren’t sure about the type of tenancy you have, make sure to check, as this could significantly affect your rights if you want to evict a tenant.
As a landlord, you can end an AST without giving a reason if:
- Your tenants’ deposit is in a registered deposit protection scheme (DPS)
- The date that the tenants leave the property is at least 6 months after the start date of their original tenancy
- The tenancy is a periodic tenancy, or the fixed term has ended
If you meet these three criteria, then you can issue a section 21 notice. In this case, you must give your tenants written notice of at least 2 months.
What if I’m still within the fixed term?
You can only end a fixed-term tenancy early in specific circumstances.
If you have a break clause written into your tenancy agreement, then you may end the fixed term tenancy before the expiry of the fixed term period. Tenants are also permitted to activate the break clause and end a tenancy early, as long as they adhere to the terms set out in the clause.
Break clauses are not mandatory parts of a tenancy agreement, so unless it was specifically negotiated when the agreement was drawn up, you probably don’t have one.
If you don’t have a break clause in the tenancy agreement, you must have specific grounds to end the tenancy. For example:
- Your tenants have failed to pay rent and are in arrears
- Your tenants have conducted illegal activity from the property
If this is the case, you’ll need to apply for possession of the property under section 8 of the Housing Act 1988.
How do I apply for possession?
First, you will need to serve your tenants with a notice seeking possession, or section 8 notice, outlining that you intend to seek possession and the grounds you are basing your application on. There are 17 accepted grounds for possession, of which 8 are mandatory, meaning that a court must order the tenant to leave.
The amount of notice that you’ll need to give your tenants will depend on what grounds you seek possession under, but 2 months' notice is the most common requirement.
If your tenants do not quit the property by the specified date, you can then apply to the court for a possession order.
Note: if you have cited discretionary grounds for eviction, the court may decide not to uphold your application for possession.
What if I also live at the property?
If you share living space in the property with your tenants, then they are residents under the terms of an excluded tenancy. There are far fewer barriers to ending an excluded tenancy.
To end a tenancy in this case, you only need to give them ‘reasonable notice’, which does not have to be in writing. Generally, ‘reasonable notice’ means equal to the rental payment period. So, if the rent is paid weekly, you will need to give 1 week’s notice.
Do I have any other options?
It can be difficult to end a tenancy early but consider that you may not need to in order to sell your property. You can sell your property without asking your tenants to leave. In fact, selling with tenants ‘in situ’ has several benefits.
Whether you want to sell your property with or without tenants in residence, iBuying services like UPSTIX can provide an instant offer and quick sale, removing any worry about notice periods and simplifying the process for you.
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